Jeff Haney gets a second opinion on a blackjack strategy question

By Jeff Haney (contact)

Monday, Jan. 7, 2008 | 2 a.m.

Don Schlesinger has challenged the answer to one of the quiz questions from the annual Blackjack Ball that appeared in Friday’s column.

The original question from the ball, a gathering of professional blackjack players, read:

“You’re playing double deck heads-up at the Wynn. The count goes through the roof with one deck left and you figure you’ve got exactly a 4 percent edge. Your bankroll before you started the hand was precisely $100,000, and you’re betting a quarter Kelly. You get a 6 and a 10 and dealer has an ace up. She doesn’t get the blackjack. Now it’s your turn to act. She has an 8 in the hole. If you play the hand perfectly, how much will you have left in your bankroll at the end of the hand?”

The answer given at the ball Wednesday evening was $99,000, with an explanation that the player would bet $1,000 on the hand. He would then take insurance for $500, lose the insurance bet, and surrender $500 for a $1,000 loss.

Schlesinger, the author of “Blackjack Attack” (2004, RGE Publishing), claims the wager would not be $1,000 for a player betting “a quarter Kelly,” a reference to the Kelly Criterion, which is a common bet-sizing technique used by gamblers.

The Kelly Criterion seeks an optimal bet size for a gambler with an advantage against the house, balancing risk and reward.

“The correct Kelly wager for the hand is not edge times bankroll it never is, in blackjack,” according to Schlesinger. “Rather, it’s edge times bankroll divided by the variance (or average squared result) of the hand.”

The variance is typically about 1.33 (4/3), depending on rules and the count, so the correct Kelly wager would be about 3/4 of $1,000, or $750, Schlesinger said.

After taking insurance and surrendering (assuming the surrender option is available on this game, of course), the player would have $99,250 left, not the $99,000 given in the answer, Schlesinger concluded.

Contest update

Tonight’s Ohio State-LSU game will decide not only college football’s BCS championship, but also the winner of the $160,000 Leroy’s “Money Talks” handicapping invitational.

Nick Bogdanovich finished 6-1 against the point spread in his seven selections in the championship round, held Dec. 28, including a best bet winner with Kansas in the Orange Bowl.

“Doc” Moseman, his opponent in the final, has a 5-1 record and “under” 50 points in the BCS title game.

LSU is favored by 4 points throughout Las Vegas, down slightly from a line of 4 1/2 that was readily available when the contestants made their picks. The total has dropped more substantially, from 50 when Moseman made the play his best bet to 47 points at Leroy’s, indicating most gamblers also like the “under.”

If it does stay under 50, Moseman will win because he has the tiebreaker point differential against the spread in their selections working for him.

Bogdanovich and Moseman were left standing from a field of 32 contestants, each of whom put up $5,000 to compete the largest entry fee for a sports handicapping contest in the state.

Bogdanovich and Moseman made a personal agreement to a modified “chop” of the winner-take-all prize pool, with the winner to receive $155,000 and the runner-up to get his $5,000 back, they said on the championship round show.

Moseman brings a contest record of 27-14 (66 percent, includes a tiebreaker round) into tonight’s game. Bogdanovich finished 20-13-2 (61 percent).

Overall the contestants stand at 201-226-20 (47 percent), according to Leroy’s.